Steel unions put forward rescue plan for ailing Corus

Steel unions have drawn up a turn-around plan for ailing Corus to prevent the closure of its Teesside and Llanwern plants and help the company achieve growth.

The plan, named Phoenix, was submitted to Corus by the National Trade Union Steel Co-ordinating Committee at a meeting with the company's chief operating officer, Stuart Pettifor, last Wednesday. The committee is planning to meet chief executive Philippe Varin within the next fortnight.

Unions, led by ISTC steel workers, believe that Corus's plans to separate the Teesside plant - which produces unfinished 'slab' steel - from the rest of the group and force it to sell its product into the competitive world market may result in the closure of the plant.

Earlier this month, Corus indicated it might be interested in a joint venture on Teesside, which could attract interest from Brazilian CSN or a consortium of European producers.

The unions add that the planned 35 per cent cut in production of finished products at Llanwern 'may result in [its] closure'.

The unions argue that the plans, which will see around 10 million tonnes of steel produced by Anglo-Dutch owned Corus, are based on pessimistic and outdated assumptions about economic growth, the fortunes of UK manufacturing and exchange rates.

Instead they argue that growth in the UK and the US, more favourable sterling/ euro exchange rates, an upturn in manufacturing optimism and output and heavy UK spending on infrastructure mean there is a mar ket for UK steel production of 13 million tonnes, and the opportunity to run plants at more economical loads.

The company is planning investment in two other plants: Port Talbot and Scunthorpe. Unions believe Teesside and Llanwern should receive investment too. Michael Leahy, general secretary of the ISTC, said 'I believe Corus is still the most efficient steel producer in the world. With investment in these plants, I have no doubt that it could be a world-beater.'